China con­sumer in­fla­tion falls to 1.2 per­cent in May

The China Post - - INTERNATIONAL - BY KELLY OLSEN

Chi­nese in­fla­tion fell to 1.2 per­cent in May, data showed Tues­day, the lat­est sign that growth in the world’s No. 2 econ­omy is stalling and sug­gest­ing more mon­e­tary eas­ing may be on the way.

The con­sumer price in­dex (CPI), the main gauge of in­fla­tion, eased from April’s 1.5 per­cent, the Na­tional Bureau of Statis­tics said.

It also fell short of the 1.3 per­cent me­dian fore­cast from a sur­vey of econ­o­mists by Bloomberg News.

In­fla­tion has been sub­dued in China as growth slows and com­mod­ity prices have fallen, prompt­ing fore­casts from some econ­o­mists the coun­try could slip into a harm­ful cy­cle of de­fla­tion.

Con­cern has grown since Jan­uary, when CPI hit its low­est point since late 2009, prompt­ing calls for au­thor­i­ties to act to stave off the trend of fall­ing prices that can choke con­sumer spend­ing and growth.

China’s econ­omy ex­panded 7.4 per­cent in 2014 — its slow­est pace in 24 years — and has shown few signs of a pick-up this year. Gross do­mes­tic prod­uct (GDP) growth slowed to 7.0 per­cent in Jan­uaryMarch, the worst quar­terly re­sult in six years.

The in­fla­tion fig­ures, which came the day af­ter data show­ing im­ports fell for a sev­enth straight month in May and ex­ports also sank, added to an­a­lysts’ pre­dic­tions of fur­ther mon­e­tary eas­ing af­ter three in­ter­est rate cuts since late 2014.

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